What criteria should I think about when planning the healthcare benefits strategy?

Haleigh Tebben / March, 2018

Description

Haleigh Tebben, Partner at Mercer explains the different criteria you should think about when deciding on your healthcare benefit strategy such as benchmarking yourself against your competitors and what the budget allow.

Video transcript:

What criteria should I think about when planning the healthcare benefits strategy?

I think the first thing is to understand what is competitive against the benchmark. Especially in this market and with the emerging tech kind of talent pool they are trying to pull from. It is very important to make sure that if you are looking at some high growth and looking to add a lot of individuals, how does your plan competitively stack up against those that you are looking at hiring against.

It is really important for us as we start to work with clients to understand who they are benchmarking against. Emerging tech is typically what we are looking at and we got a lot of good data to help them understand what is typically being offered so that they can understand if they are competitive or not. That’s first.

The second is obviously, what does the budget allow. There are things that you might say that you’re not able to get to benchmark or get competitive in just because you aren’t able to do it from a financial perspective. But it is important to understand that the benchmark and the competitive landscape as to what’s being offered by your peers before you start designing your plan.

Then it is important to think about what your future strategy looks like so at what point would you potentially move from a full insurance plan to a self-funded plan. A lot of that is reliant on employee headcount growth and when does it make sense and also thinking about when you would potentially look at going IPO.

Pre-IPO it is important to make sure that you are reducing risks and retaining cash and so some of those self-funded arrangements while in the long term they can definitely be more efficient, and they can take the profit that the insurance company is making on the fully insured plans out of the mix. It does reduce risk and takes some cash off the table if you’ve got some good fully insured rights that you’ve negotiated.